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Companies Play Waiting Game; Strategy Puts Sublease on Hold

AUSTIN-Area companies are content to "wait and see" what happens with the economy before locking into lease changes. The mindset is driving month-to-month deals, signing incentives and lower rent.

By Tim Green | Updated on October 02, 2001

AUSTIN-An Austin technology company is increasingly crowded in its class B space in the far northwest submarket, but it’s waiting for the market to stabilize before leasing more space. Another company scouted space for six months before settling into a class A sublease in north Austin.

As such companies play the waiting game, the terms of available sublease space shorten, cutting rates and shortening the time until they revert to the building owner. For now, landlords are getting rent from original tenants.

The amount of sublease space available has bedeviled the Austin commercial real estate market all year. Estimates of the open space range between 1.9 million sf and 2.4 million sf. The difference is whether the space is available now or being marketed now for occupancy later.

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